Redfern is sued over winter bills

Posted: Thursday, March 05, 2009

By KATE GOLDEN

A construction contractor has sued Canada mine company Redfern Resources Ltd. over $3.6 million in allegedly unpaid bills.

Redfern, owned by Vancouver-based Redcorp Ventures Ltd., hopes to reopen the long-defunct multi-metal Tulsequah Chief mine, located about 45 miles northeast of Juneau. The company has controversially proposed hauling ore and supplies to the mine using a hoverbarge on the Taku River.

"We're the general contractor out there, and they have not paid their bills," said Ted Pickell, owner of Arctic Construction Ltd., based in St. John, British Columbia.

Arctic agreed in June 2007 to build a mine access road, airstrip and camp at the mine, according to its statement of claim filed Feb. 23 in the Supreme Court of British Columbia.

In January 2008, Arctic reduced its rates on some equipment by 5 percent, and in return Redfern gave the company more work building earthworks, retaining walls and tailing ponds, crushing aggregate and hauling materials from a barge landing, the claim says.

Redfern told Arctic Feb. 19 it was suspending construction on the project and terminated the contract.

Arctic says it never got the extra work, the reason it had given a discount, and says the company owes more than $3.6 million for the bills plus damages for breach of contract, general damages, costs and interest. Most of the invoices listed are dated from the last three months.

The company acknowledged the suit in a press release but did not respond Tuesday to e-mail or phone queries.

The mine's construction is suspended indefinitely, the company announced last month.

Recently Redfern increased its estimate of the capital cost of the mine to at least $430 million and possibly more than $500 million. A mid-2007 estimate was $202 million. The company has spent about $171 million so far developing the mine, according to a Feb. 17 statement.

Redfern's stock was trading this week at one cent per share.

The mine was scheduled to start production in August 2010 and continue for eight years. In Redfern's statement to investors last month, the company said it had "serious concerns" whether it could restart without "strategic partners."

Pickell said he wasn't the only company that hadn't been paid. But at least one Juneau company reported its past dealings with Redfern had gone well.

"We only had about $30,000 worth of business with them, but they were always current," said Mike Halverson, business manager of Juneau-based Channel Construction Inc., which worked for the company in 2007.

CANADA PERMIT APPROVED

Redfern's controversial plan to run a barge in the winter and summer on the Canada side of the Taku River was approved by British Columbia permitters this week.

Redfern still needs Canada's federal Department of Fisheries and Oceans, and the state of Alaska to sign off on the barge proposals.

The province's environmental permitters required the project to develop a spill prevention and contingency plan before starting, to notify river users each day of the barge schedule, and to monitor wildlife and aquatic impacts.

Redfern proposes using several amphibious vehicles to push and pull a hoverbarge across open leads and ice on the Taku in winter. The company will run conventional barges with shallow-draft tugs in the summer, as it has done the last two years.

It is the company's second permit application since late 2007; the state canceled the first one after the company scrapped a plan to use an amphibious concept vehicle.

The permit process on this side of the border is on hold while the company responds to questions from Alaska permitters.